Institution: The surge in the US dollar may suppress the demand for gold purchases by central banks

Massive gold purchases by central banks have been one of the factors supporting gold prices, and the current surge in the dollar may curb demand from central banks. Data from the World Gold Council shows that central banks have purchased 694 tons of gold this year to diversify their holdings and reduce their reliance on the dollar. George Saravelos, head of foreign exchange research at Deutsche Bank, said Trump's policies could weaken emerging market currencies. He said: "Many central banks now need to use their dollar reserves to protect their foreign exchange from capital outflows and prevent excessive exchange rate weakening."